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Tirupur industry stares at Rs 15k cr loss due to COVID

Mar 28, 2020
Tirupur industry stares at Rs 15k cr loss due to COVID

On March 24, the Managing Director of DSP Garments, a well known innerwear brand in Tirupur, Surya Prakash, told his family that he was going to Bengaluru on business. He had been undergoing treatment for depression for the past 20 days. The reason – teetering losses in business, thanks to a series of unfortunate events, culminating in the global Coronavirus situation.

But Surya Prakash did not go to Bengaluru. He went to Coimbatore’s Residency Hotel, booked a room on the sixth floor and took his life. Surya Prakash was only 34 years of age.

It is not known how much of a loss Surya Prakash had to bear. But what is for sure is that the textile industry of Tirupur is reeling under the shock of the virus.

Even before Section 144 was imposed on March 24 across the state of Tamil Nadu, Tirupur wore a deserted look.

The Manchester of India or the Dollar City, famed for its large textile industry, is usually a crowded congested city with Tamil and Hindi ringing out together as migrant workers and locals work side by side to make a living.

As The Lede entered the garment factory belonging to Raja M Shanmugam, a large firm called Varsha International, no one was willing to shake hands.

An assistant told The Lede that in Tirupur nowadays, no one extends a hand. A vanakkam with folded palms is in order.

Raja Shanmugam, who is also the president of the Tiruppur Exporters’ Association is a worried man. He is anxious about the future of the textile industry.

“In Tirupur, as you know, we are all exposed to the Western markets, particularly European Union and America. Both markets have dwindled because of this Coronavirus crisis. All the governments have shut down the businesses in entirety in European Union as well as the US and Canada too. This is the greatest evil situation that we have experienced in our lifetime,” he began.

Shanmugam had held a meeting last week with all associations that represent different units in Tiruppur’s textile hub. In that meeting, which was attended by big and small textile factories, it was decided that all firms will continue to work and that the associations would help everyone get support from the government.

But despite this decision, all companies, large and small are staring at huge losses. “Tirupur is doing a turnover of around Rs 2500 crore per month. So if you compute this January and February itself, it comes to Rs 5000 crore. In this month, Rs 2500 crore worth of business is happening, but everything has been put on hold. So now no shipments have been allowed and those which are on the high seas right now, they are a big question mark because they are not likely to get clearance. There is no one there to clear the goods and take it to the warehouse. So this is the worst situation that we have faced. In these three months alone we have taken a big hit to the tune of Rs 7500 crore,” laments Shanmugam.

But the damages are, in reality, far worse. Franklin Augustine, a shipping company owner told The Lede that the industry was in fact looking at double the losses.

“No orders are to be taken for the next three months. The government has said there will be no exports for the next three months. We will know the status only in July,” he said.

With another three precious months gone, Tirupur’s losses are pegged at Rs 15,000 crore.